Foreclosures Hit Home Market Prices in 20 Cities

The home price index in 20 metropolitan cities in the United States declined by 18.2 percent for the annual period ended November 30, 2008.

The 18.2 percent decline in the S&P Case-Shiller Home Price Index was the lowest level since February 2004. The home price index peaked in mid-2006 but took a sharp dive by 25.1 percent which was blamed on foreclosures.

Research showed that areas with an increased in the total number of foreclosed homes have experienced drastic dropped in home market prices.

Out of the 20 sampling cities, 11 showed record declines. Meanwhile, the 12-month home market price posted a double-digit decline for 14 cities of the 20 sampling areas.

Hardest hit by foreclosure and home market price drop are cities in Southwestern State. Following is a list of cities and the corresponding price drop in home market for the 12-month period:

• Las Vegas, Nevada – 31.6 percent
• Phoenix, Arizona – 32.9 percent
• Cleveland, Ohio – 5.2 percent
• Denver, Colorado – 4.3 percent
• Charlotte, North Carolina – 5.3 percent
• Dallas, Texas – 3.3 percent

Standard and Poor’s Index Committee Chairman David M. Blitzer said that the steep decline in prices of homes continued until November 2008. He added that prices declined by average of 1 percent in various regions of the country during the period of October-November.

According to studies, the decline in the home market prices was due to a homebuyer’s perception of the community and the neighborhood. Homebuyers will likely refuse to live in an area where there are quite a number of repossessed homes.

A distressed property in need of repair and deteriorating surroundings may also influence other homeowners in the area to sell their properties because they deem the neighborhood not fit to live anymore.

Meanwhile, Weiss Research real estate analyst Mike Larson does not expect any improvement in the housing market as long as layoffs are being done by some industries and foreclosures remain unabated.
He predicted that for 2009, home prices will decline but in a slower pace.

Related Posts:

• San Francisco S&P Index Down, Foreclosed Home Auctions Up
• Real Estate Prices in the United States Now at 2004 Levels
• Repo House Listings Slow Down, Tampa Bay Home Prices Rise
• Sales from Lists of Foreclosed Homes in Sacramento Still Up
• Home Prices Fell Due to Increasing Bank Owned Foreclosures